Italy: Employment law reform
27 June 2012
In March 2012, the Government issued
their proposals for the reform of Italian labour law. The
draft was approved by the Senate on 30 May and will soon be debated
in the Chamber of Deputies, the other chamber of the Italian
Parliament. The reforms modify the regulation of employment
contracts, reform the consequences of unfair dismissals and provide
for a new labour process and a new welfare system.
The main areas affected by the reform are
the following:
- Fixed-term contracts;
- Apprenticeship contracts;
- Dismissals;
- Employment litigation after a
dismissal.
FIXED-TERM CONTRACTS
Companies will be free to use fixed-term
contracts for any reason they wish. Technical/
organisational, production or substitution-related reasons will no
longer
need to be provided for fixed-term contracts which last less than
12 months.
APPRENTICESHIP
CONTRACTS
The proposed reforms are aimed at making
apprenticeships the main way for young people (those aged 29 and
under) to enter into the labour market. They stipulate a
minimum six-month duration of apprenticeship contracts and
establish a ratio of 3 to 2 apprentices compared to the number of
qualified employees. This ratio cannot exceed 1:1 in
companies which employ fewer than 10 employees. Apprenticeship
contracts are (and will be) subject to a competitive social
security charge which makes them significantly less expensive than
permanent contracts.
DISMISSAL
The reforms will bring major changes to the
regulation of dismissals. The draft reforms Article 18 of the
Workers’ Statute and lists the consequences for each type of
dismissal. Under current law, should an employee (in a
company with more than 15 employees) be unfairly dismissed, he/she
would be entitled to reinstatement (which can be substituted at the
employee’s request with a payment in lieu of 15 months’ pay) and
back pay (from the date of dismissal up to the date of
reinstatement; this sum is not capped). The reform will bring
an end to automatic reinstatement in the event of unfair
dismissal. This will be replaced by a simple payment
representing 12 to 24 months’ pay.
EMPLOYMENT LITIGATION
The draft reforms also introduce new rules
for simplifying and speeding up procedures at the Labour Courts in
claims involving a dismissal. The current average
duration of cases before the Italian Employment Tribunals is
between 12 and 18 months, depending on whether the Tribunal is
situated in the north or south of the country. Thanks to the
reforms, all employment cases will have a fast-track procedure,
with a judge making an initial finding on the dispute and
issuing an order within a few weeks.
By Federico
Strada, La Scala Studio Legale, in association with
Field Fisher Waterhouse LLP (Brussels)